With Iran and the US coming to terms over the Islamic Republic’s nuclear program, India finds itself in an enviable position where all the players in the game have aligned on the same side – one big “Us,” Israeli protests not withstanding.
Moving forward, India will be more than willing to sign on the dotted line on several deals in the pipeline with Iran, especially in the steel sector. In March, Iran’s Deputy Industry Minister, Mehdi Karbasian, was quoted by Azer News saying Iran was ready to accept Indian investment in the steel sector, and “planned to start activity in the country.”
Along with India, a large number of other foreign mining companies including some from Kazakhstan had already visited Iran in the past year, looking for similar investment opportunities.
New SAIL Facility
At the start of 2015, India’s state-run Steel Authority of India (SAIL) had announced a proposal for a multimillion dollar, nearly 2 million-metric-ton integrated steel plant in Iran.
SAIL has already asked the Iranians to provide 500 hectares of land near the country’s Bandar Abbas port and another 500 hectares of contiguous land for future expansions.
The proposal has also been discussed between India’s steel minister, Narendra Singh Tomar, and Iranian envoy Gholamreza Ansari in December. To get the project up and running, SAIL sought captive access to iron ore, limestone and dolomite from Iran.
In fact, late last year, SAIL, bagged an export contract of 1 million mt of rail steel for Iran Railways.
Following the Lausanne agreement, some long-pending projects between India and Iran could be put back on the negotiating table. One of them is sourcing natural gas from Iran. India has been actively looking at the international market for natural gas. There’s been a proposal of routing gas from Iran through Pakistan to India, and some analysts believe, this particular proposal may now be re-examined, too, though how much Pakistan would cooperate is anybody’s guess.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.